The Hindu Business Line : Benchmark AMC plans first silver ETF

Mumbai, July 22 Benchmark AMC has sought SEBI’s approval to launch the first Silver Exchange Traded Fund (ETF) in the country. The AMC has filed the draft offer document to launch its Silver Benchmark ETF (Silver BeES).

The silver BeES would be an open ended exchange listed scheme, which will be listed on the NSE. The investment objective of the ETF is to provide returns that correspond to the returns provided by silver, by investing in units of overseas mutual fund schemes, which will also include international silver ETFs.

The fund will use rupee denominated international prices of silver as the benchmark for the scheme.

Growth option

Benchmark’s Silver ETF will invest at least 90 per cent of its total assets in units of overseas mutual fund schemes. The scheme will hold up to 10 per cent of its total assets in other securities or instruments such as G-SECs, bonds, debt instruments etc. The scheme will offer only growth option.

Depending on when the company will get approval from the market regulator, SEBI, the AMC will come out with the NFO for the scheme, said Mr Mehta.

According to the offer document, the scheme expects to garner a minimum of Rs 1 crore through the NFO. On Tuesday, the price of silver quoted higher at Rs 25,885 per kg, which is a gain of Rs 460 since Saturday.

“We plan to come out with more ETFs that will represent different asset classes. And in the future, we plan to come out with new products, which will make sense to the investors,” said Mr Rajan Mehta, Executive Director, Benchmark AMC.

Earlier during the year, the AMC filed a combined offer document with SEBI for four of its global-theme-based ETFs (clean energy, private equity, commodity and water fund).

Benchmark was the first fund house in the country to come out with gold ETF (Gold BeES) in February 2007 and it has the largest assets amongst the five listed ETFs on the NSE as on June 30, 2008. Mr Mehta said he is hopeful that the silver ETF will also be as popular as the gold ETF.

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